Repossession fears over new MoJ numbers

ANY REPOSSESSION is a tragedy for the person involved, and latest figures indicate the number of victims falling victim is currently rising fast. 

New data reveals repossessions doubled in the last three months of 2022, and it has understandably raised fears more mortgage holders could lose their homes.

The data, released by the Ministry of Justice, showed repossessions by county court bailiffs across England and Wales rose from 313 to 733 between October and December last year - which is a spike of 134 per cent. 

At the same time, the figures showed a similar trend for tenants - with landlord repossessions jumping from 2,729 to 5,409 which is a rise of 98 per cent.

But despite these stark figures there are reasons to be more hopeful we're not returning to the bad old days of mass repossession which we saw in 1991 and 2008.

Cautious approach

 In fact, given the combined effects of a pandemic, rate hikes, the cost of living crisis and more, it is surprising repossessions in 2022 were not far higher. 

When you compare the current figures to the 40,000 of the 2008 crash and the 75,000 seen in 1991, it is clear the misery could be far more widespread

So why are levels not spiralling in the same way? Well, a more cautious approach to lending has helped enormously. Homeowners now hold a much higher financial stake in their home and will be less likely to walk away. This gives confidence to lenders, who have been more tolerant of late of missed payments.

Thanks to the rise in prices, buyers have also become older, the average is now 37. This means they are more likely to be financially stable and may have already received inherited money. In any event, the spike in prices has allowed older relatives to assist off-spring, for example, by using equity release.

High and dry

The opening up of the economy, thanks largely to the advent of the internet has made it easier for people to boost their incomes to keep up with payments. The Internet has also led to an explosion of companies that guarantee to buy any property.

I remember the previous recessions clearly, there were no companies that would buy an unwanted home in a fast and professional way with guarantees. At the time I was a young estate agent and it was really upsetting to see people repossessed because a buyer didn’t follow through with a purchase.

Saved from repossession

Sometimes this was because they couldn’t raise the money needed or infuriatingly, sometimes because they just changed their mind and left the seller high and dry.” 

At the National Association of Property Buyers, our members purchase about £1.5bn worth every year – which equates to around 10,000 homes.

Our most recent research indicates that 10% of sellers are currently ‘financially distressed’ which is potentially 1000 owners saved from repossession.

Thankfully, anyone in that position now has many more options.  They should speak to their lender who will likely be sympathetic and will try to work out a payment plan to avoid repossession. 

 Auctions work well for a quick sale but aren’t guaranteed and can incur costs. If considering a quick sale company I’d urge sellers to consider other options first as prices paid will be lower than full market value. But there are clear benefits if the circumstances are right. Only use a member of an accredited organisation as they will abide by a strict Code of Practice and a redress scheme in case anything goes wrong.